City council live blog 5/22/12: Taxation without documentation

Tuesday

May 22, 2012 at 8:20 PM

Posted by Jeremy Shulkin

It'll be grueling council meeting tonight, as there's a budget hearing at 5:00, tax classification at 7:00 and then the regular agenda items afterward. I&nbsp;wrote about seeing Jose Canseco's first Worcester home game last night, if you'd like a distraction.

See you at 7:00.

7:26:&nbsp;Here we go. The Mayor's office set up a number of air condtioners in anticipation of the large crowd, but it's still heating up.

We're starting with the tax classification.

John Merril, president of Fidelity Bank and WBDC&nbsp;member and Chamber of Commerce treasury talks about the view as a home owner. He works the angle that a vibrant economy leads to better residential property values. He says he has a client who was moving to Marlborough, but they were convinced by local pols and him to move to Worcester. &quot;He couldn't believe this was the city he saw 20 years ago...He said, 'boy, what's happened?'&quot; &quot;Please, as a homeowner, don't put the city at a competitive disadvantage...I strongly encourage you to support the Chamber's recommendation.&quot;

Bob Smith of Norton/Saint-Gobain says his company is still very local, spending $80 million with area businesses, plus $1 mil + in charity annually. &quot;The situation at hand is concerning&quot;&nbsp;he says about their valuation combined with the company's infrastructure needs. Their property assessments increased between 150% and 400%, depending on the building.

A Keller/Sadowsky representative says even though assessments have caused the trouble, he'll still talk about the tax classification. &quot;Our guys are on the front line of individuals and businesses coming into the area...the city gets a very, very bad rap.&quot; The example he says, is the Worcester-Shrewsbury line near Bowditch Drive/Plantation Street. &quot;On the WOrcester side the tax per year is $1.80 per square foot. On the Shrewsbury side 500 feet away, $.52 per square foot.&quot; It can equal up to $38,000 per year. &quot;The city gets a bad rap from outside and from inside.&quot;

Jack Woods lays out his home assessments v. his commercial assessments, and considers himself lucky when he reads his commercial valuation. &quot;More equitably sharing&quot; city services is better for the city, he says.

George Valeri calls a $16.98/$29.08 split &quot;win-win&quot; for everyone.

Billy Breault says it doesn't make sense to change the tax rates based on &quot;exorbitant&quot; commercial assessments.

Roberta Schaefer quotes Bill Eddy from this morning's T&G&nbsp;article, but says the only way to &quot;avoid this perennial battle&quot; between res/comm is to phase in a single tax rate over the next three years. She says this was a conclusion brought forward by Joe O'Brien's task force when he was mayor. &quot;There is no doubt that a more equitable tax rate would make Worcester more attractive for business to stay, grow and compete.&quot;

Robert Seder, chair of the WBDC, says he recruits businesses to come to Worcester. &quot;The other part of this city government seems to militate against business&quot; with the tax classification. &quot;It just doesn't make sense.&quot; Why would businesses come to/stay in Worcester when Auburn and surrounding towns have similar amenities? He says with the purchase of the T&G&nbsp;building the WBDC needs to attract tenants, but how can he get businesses to over look the tax rate. &quot;The 20 year experiment with tax classification&quot; hasn't worked he says, and agrees with Schaefer that the gap should start being phased closed.

Jenny Pedano (SP?) says it's National Small Business Week. &quot;I&nbsp;personally feel this will be a train wreck on the city of Worcester,&quot; she says about the assessments. &quot;Council members need to realize their potential to bring this community back together...Businesses are not breaking down Worcester doors to purchase property.&quot; She calls campaign promises to vote for the lowest tax rate as &quot;tired.&quot; &quot;Blanket statements made in campaigns is never a good idea no matter what the campaign is.&quot;

An Autobody repair business owner says he's had to cut employees over the years. &quot;I don't have any other way to cut my expenses...I'm very close to Grafton and Millbury, but I like being in Worcester.&quot;

Roy says his school house built in 1879 is now assessed at over $1 mil. &quot;How does someone justify making that kind of an increase on Pleasant St?&quot;

John Reed is in favor of the lowest res tax rate. &quot;I&nbsp;always say think inside the box...computers are dumb machines, they do what you tell them to do.&quot; He says businesses went from being undervalued to overvalued, but he says those are &quot;separate issues.&quot; He says they should bring a virtual casino into Worcester to gain revenue without raising taxes. He talks about the world changing to adversely impact homeowners.

A man in the commercial real estate business says everyone &quot;needs to sit back and think about the future of Worcester.&quot;

Raymond Lopolito (SP?) does real estate. &quot;I see the problems.&nbsp;I&nbsp;see the writing on the wall.&quot; He says the forefathers are probably rolling in their grave. &quot;With the economic downturn does that mean we have to gouge our neighbors a little bit more?&quot;

Lenny Zalauskus of the teachers union says &quot;it's interesting to be here with a bunch of business people instead of school teachers.&quot;&nbsp;He says he supports the Chamber's tax proposal. &quot;We need economic development to come to Worcester which would help support the schools.&quot; He says more businesses need to partner with the WPS.

Beth Proko of Worcester Citizens for Business says &quot;no one wants to pay more in taxes...this battle of pitting residents and businesses against each other must end.&quot;&nbsp;She says part of the problem is promising how to vote during municipal elections, especially when the numbers were only released this week.

A Blackstone River Road floral shop owner says small business retail doesn't need a brick and mortar storefront anymore, something that&nbsp;hasn't been mentioned. &quot;When I&nbsp;look at my business plan going forward I&nbsp;don't have to move to Milbury,&quot;&nbsp;she says, when she can just go online only. She wants the city to move toward a single tax rate.

Dick Kennedy of the Chamber of Commerce proposes $17.18/$28.56 split for res/com.&nbsp; &nbsp;

That's the end of public testimony. Mayor Petty starts begins the councilors' portion of the evening.

&quot;I&nbsp;can tell you, this city council gets it. I think the council recognizes the burden placed on the business community [regarding assessments].&quot;

&quot;The dual system does hurt the attraction of business to Worcester.&quot;

Petty proposes a $16.98/$29.08 split.

Lukes says &quot;the arguments don't really change from year to year&quot; except that this vote is so much later than they usually are. &quot;When we look at this process it is way off our normal clock line. So what we're doing is playing catch up.&quot; She also points out that the next tax vote is in six months, which will lead to more abatements filed in a short amount of time. &quot;Some have suggested what has happened was criminal, some have said it was just incompetence.&quot; She wants an investigation.

&quot;There are still mistakes and they still cry out for attention and they cry out for remediation.&quot; She says she's always voted lowest res because &quot;I truly believe that shelter is a priority...there is no way to consider [tax classification] a fair and equitable process because it is not.&quot;

She says she proposes a &quot;level tax&quot; for residential, which means $16.70/$29.82. &quot;That means the average res. property owner is going to pay what they did in their last tax bill.&quot; But, she notes that res. valuations went down but will see their taxes go up. &quot;It is very difficult for me to understand how an elected official cannot vote to support homeowners.&quot; She says taxes didn't come up in a recent T&G&nbsp;article as problems that companies face in Worcester.

&quot;Worcester is still affordable no matter what we think about the unfairness of the tax classification.&quot; She points out that &quot;there is no blame here&quot; because the revaluation came as a mandate from the state, not the City.

Economou says &quot;the further we start talking about Worcester as whole the sooner we can start moving the city forward.&quot;&nbsp;He says this is the &quot;worst&nbsp;scenario&quot;&nbsp;they could be in, and wonders if/when Saint-Gobain is going to leave.&nbsp;&quot;Where are they going to go?&quot;&nbsp;he asks about the theoretical employees out of their jobs. &quot;It's not residents, it's not commercial. We're all in together. The sooner we can look at it as a whole, the sooner we can have an honest and a frank discussion moving this forward.&quot; He proposes $17.08/$28.82

J.O'Brien says his promise to vote for the lowest res. rate when he campaigned for mayor in 2009 was a &quot;mistake,&quot;&nbsp;which he learned after he started meeting with business people and doing his business retention/attraction report. He calls last year's vote &quot;modest progress&quot;&nbsp;as they eeked away from the lowest res. rate. He supports Petty's proposal for rates. (Last year was $15.15 for residents.) He says Petty's proposal would further close the gap between the two. &quot;When you look for middle ground, you raise the risk of leaving both sides unhappy.&quot;

Toomey calls this a &quot;unique situation&quot; doing the vote so late this year. &quot;We need to keep business in Worcester to try and compete with surrounding towns.&quot; She calls this her most difficult vote she's had in 13 years of office (7 as a councilor, 6 as a School Committee member). &quot;I'm going to vote in the best interest of Worcester's future. I believe that the mayor's compromise is the best compromise of all.&quot;

Eddy says Beth Proko's point about committing early in campaigns causes problems. &quot;I used my best judgment last year&quot;&nbsp;when he strayed from lowest res. last year. He calls the dual rate &quot;a dumb idea&quot; but now the question is how do you fix it? But, he says you can't have a $5 mil shift in three years if you were to totally move the res/comm rate to a single one.

He calls this a &quot;lousy process&quot; and blame goes all around, from DOR, council to city admin. He says &quot;I&nbsp;can't find justification to look a voter in the eye and tell them I'm raising their taxes this year.&quot; He calls it a slower process to move to the single rate but it'll be &quot;long after I'm gone&quot; from the council, not in 3 years. &quot;I&nbsp;cannot look voters in the eye this year and say I'm raising your taxes this year.&quot;

Russell says he rises &quot;primarily to support the homeowner.&quot; He also says to support the business he fought the assessing process &quot;even before day 1.&quot;&nbsp;&quot;I hate to say I&nbsp;told you so.&quot;

&quot;I'm not going to turn my back on the residents of my district to make good on the mistakes of previous assessors or this year's assessor and the Department of Revenue.&quot;

&quot;What you will be doing is giving those businesses an extensive tax break&quot; with some of the rates proposed tonight &quot;at the expense of the homeowner.&quot; He says he'll support Lukes' compromise only because he knows there aren't enough votes to get the lowest res. rate.

Rushton:&nbsp;&quot;There seems to be a lot of negativity floating around the chamber tonight and I&nbsp;just want to focus on the positive.&quot;&nbsp;He says we rank #1 in &quot;growth and knowing where we're going&quot; in New England. He says there's a stable base of manufacturing employment and, as a speaker said earlier, a company met with the CM&nbsp;and Congressman and it was convinced to move to Worcester. &quot;That's special. People say that all the time about Worcester:&nbsp;people are working together.&quot; He praises North High and Worcester Tech. &quot;We are moving in the right direction and we're doing it together.&quot; He says there's a governor on &quot;our economic engine&quot;&nbsp;that's been there since 1984, when the tax rate was split.

He initially says he agrees with the Chamber's line, but will vote with Petty's. &quot;We're going to have an opportunity here to march toward that single tax rate,&quot;&nbsp;though &quot;the call for that happen immediately isn't realistic.&quot;

Germain supports the Mayor's proposed line. He calls this a &quot;tough&quot;&nbsp;process&nbsp;with a lot of finger pointing. &quot;Nobody, dare I say for the first time, nobody reached for the cheap seats, nobody did the politically correct thing.&quot; He says for the first time &quot;everybody felt something needed to be done to support the business community.&quot; He says businesses have costs that you wouldn't expect, and he wants a report on start-up costs for business and other expenditures they have beyond taxes/salaries/etc.

&quot;It's clear that current [dual rate] doesn't work&quot; and many say in retrospect that &quot;it's the worst vote I ever took&quot; back in 1984. He says it's time to &quot;start marching back to a single tax rate.&quot; He talks about looking at a ten year plan to go to the single rate.

9:11: Rivera says she made the lowest res. tax commitment when she ran because of the number of foreclosures in District 4. &quot;Those are the people I&nbsp;was thinking of.&quot; She says she's learned a lot working with businesses in her district during her term. &quot;The numbers were different, the situation was different,&quot; so promising a tax rate was different.

&quot;I am committed to progress,&quot; she says, before proposing a $16.84/$29.86 rate.

9:15: Palmieri calls this &quot;one of the most critical issues that we've seen&quot; on the council. &quot;We've seen growth that has been unprecedented in the city. No matter where you look what you see is people working...and a downtown trying to find its way.&quot; He calls the mall about to be demolished &quot;the great wall of China.&quot;&nbsp;He says &quot;I&nbsp;guess the business community doesn't see that, doesn't understand that.&quot; He adds that will make the East side a development corridor that was taken away by the mall 50 years ago.

&quot;One vote...either you're anti-business or you're not,&quot; he laments. &quot;There has been what I&nbsp;consider to be good, healthy conversation on the council floor.&quot;

He points out that the city has lost $20 mil in local aid from the state over the last five years. Only 67% of property holders pay taxes on their property because of nonprofit status. &quot;How do we make that up?&quot; ($2.7 billion in assets, he says.) He says they've had to agree to TIF agreements to encourage companies to move downtown. Again, &quot;how do we make that up?...but in order to build our city we had to go that way.&quot;

9:44:&nbsp;Rushton talks about developing more public art in the city, especially involving youth, and making it a year-round initiative rather than just during the months that Art in the Park is up.

9:46:&nbsp;J.O'Brien wants to look into passing a temporary moratorium on new livery licenses until there's a public hearing featuring both livery and traditional cab drivers. He wants a report on the cost of regulating the livery industry. He also wants to know who regulates livery licenses, and if it should fall under the license commission's purview.

9:54:&nbsp;And we're done.&nbsp;

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City council 5/22/12

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